Just wanted to add another perspective on this since I handle payroll for several small businesses. The confusion often comes from thinking about cash flow vs. tax treatment. From a cash flow perspective, you're only "out of pocket" for your 50% contribution. But from a tax perspective, you're paying the insurance company 100% of the premium and that's your deductible business expense. The employee's pretax contribution isn't really "their money" in the traditional sense - it's a reduction in the wages you would otherwise pay them. So you're essentially paying them $500 less in taxable wages each month and using that $500 toward their health insurance instead. The total amount you're paying to the insurance company ($1000) is still a legitimate business expense regardless of how it's funded. This is actually one of the most tax-efficient ways to provide employee benefits because both you and your employees save on taxes. You get the full business deduction, and they avoid paying income and payroll taxes on their contribution portion. Win-win!

As someone who just went through setting up health insurance for my small marketing agency, I can confirm everything that's been said here is correct. The full premium amount is deductible as a business expense, even including the employee pretax portions. One thing I'd add is to make sure you're keeping really good records of all this. I set up separate accounting codes for my portion vs. employee contributions just to make it crystal clear during tax time. My bookkeeper recommended tracking the total premium payments to the insurance company in one account, and then showing the employee pretax deductions as a separate line item that offsets payroll expenses. Also, don't forget that if you're using payroll software like QuickBooks or ADP, most of them will automatically handle the pretax calculations and generate the right reports for your tax preparer. Just make sure the pretax deduction is set up correctly in the system from the start - much easier than trying to fix it retroactively! The tax savings really do add up. Between my business deduction and my employees saving on their income and payroll taxes, we're probably saving around $4,000 collectively per year compared to if everyone just bought individual policies. Definitely worth the administrative hassle!

Don't forget to look at your state tax situation too! Even if you don't need to file federal, some states have lower thresholds. I was in your same situation in GA and still had to file a state return.

Since you're in South Carolina, you're actually in luck! SC has a pretty straightforward tax situation for students. You mentioned that SC state tax is listed on your paystubs but no amounts are being deducted - that's likely because SC has a standard deduction of $12,000 for single filers in 2025, so with your $11,500 income, you probably won't owe any SC state taxes. However, I'd still recommend filing both federal and state returns. For federal, you'll get back that $1,250 in withholding since you're under the filing threshold. For SC, even though you might not owe anything, filing ensures you get any state withholding back (if any was taken) and creates a record. One thing to watch out for - make sure your parents aren't planning to claim education credits based on your tuition expenses. If they are and their income is within the phase-out limits, that could affect whether it makes sense for you to remain a dependent. The coordination between your tax situation and theirs is worth discussing as a family to make sure everyone gets the maximum benefit.

Just want to share from experience - my accountant says the simplest approach is to create a separate Schedule C for "Miscellaneous 1099 Work" where you can group all those small payments. Way easier than doing separate forms for tiny amounts. And yes, DEFINITELY track all expenses related to earning that income! Mileage to client sites, portion of internet/phone, software subscriptions, any equipment, etc. Those deductions can really add up.

I'm dealing with a very similar situation and wanted to add my perspective after going through this last year. I had about $3k in payments under $600 that I was debating whether to report. I ended up reporting everything, and honestly, it was the right call. Yes, it made my taxes slightly more complicated, but here's what I learned: 1. The peace of mind is worth it. No stress about potential issues down the road. 2. Business expense deductions actually made it worthwhile. I was able to deduct home office expenses, software subscriptions, and even some meals with clients that I hadn't been tracking before. 3. It established a proper paper trail. Now I have documented income history that's helpful for things like loan applications. The key is good record keeping. I use a simple spreadsheet to track all payments (even the tiny ones) and match them with related expenses. Makes tax time much smoother. For what it's worth, my CPA said she sees people get into trouble more often for NOT reporting small amounts than for over-reporting. The IRS appreciates honesty, even if it means more paperwork.

Has anyone tried using the specific ID method for figuring out which shares you sold? I'm dealing with multiple purchases of the same stock over years and some sales are showing up as undetermined. My broker is telling me to use FIFO (first in, first out) but I think that's going to result in a higher tax bill.

This is exactly the situation I found myself in last tax season! What helped me was creating a detailed spreadsheet tracking all my transactions. For the undetermined term lots, I went back through old account statements and trade confirmations to establish purchase dates. One tip that saved me time: if you have dividend reinvestment records, those often contain the purchase dates for fractional shares that might be causing some of the "undetermined" classifications. Also, don't forget that for inherited securities, you get a stepped-up basis to the fair market value on the date of death, and the holding period is automatically considered long-term regardless of how long you actually held them. The key is being systematic about it. I used Form 8949 with the appropriate boxes checked (C for short-term noncovered, F for long-term noncovered) and made sure to include code "B" in column (f) to indicate the basis wasn't reported to the IRS. Keep all your documentation - the IRS may not have the broker's records, but they can still ask you to substantiate your positions.

I completely understand your anxiety - I was in a nearly identical situation about two years ago. US citizen living in Germany for 6 years, hadn't filed a single return or FBAR, and was terrified about flying back for my father's funeral. The reality is exactly what everyone else has said here - there are no IRS agents at airports checking tax compliance. I flew into Miami International and the CBP officer literally spent 30 seconds checking my passport and asking basic questions about my trip purpose. Zero mention of taxes, filing status, or anything related to the IRS. However, I learned something important that might help you: even if you can't get fully compliant before your trip, you can at least start the process. I began gathering my documents and researching the Streamlined procedures before I left, which gave me some peace of mind. It showed me that there was a clear path forward and that my situation wasn't as hopeless as I'd imagined. The Foreign Earned Income Exclusion ended up covering most of my overseas income when I finally filed through the Streamlined program. What felt like an insurmountable tax disaster turned out to be mostly paperwork with minimal actual tax owed. Focus on your family emergency first - that's what matters right now. The tax situation can wait a few more weeks, and honestly, having this conversation here has probably done more to educate you about your options than months of worrying in silence ever could.

I want to share some additional reassurance from a legal perspective. I'm an attorney who handles expatriate tax matters, and I can confirm that what you're experiencing is extremely common anxiety that's largely unfounded. The IRS Criminal Investigation division has very limited resources and focuses on cases involving willful tax evasion, fraud, and significant amounts of money. Simply not filing while living abroad doesn't meet their threshold for criminal investigation. Even civil enforcement typically starts with letters and notices to your last known address, not airport detentions. What's important to understand is that there's a distinction between "failure to file" (which is your situation) and "tax evasion" (which involves willful attempts to hide income). Your case falls into the former category, especially since you've been paying taxes in Japan and weren't trying to hide anything. The Streamlined Foreign Offshore Procedures were specifically created by the IRS to address the massive population of non-compliant US expats. The program acknowledges that many Americans abroad simply didn't know about their US filing obligations or found the requirements overwhelming. The fact that this formal program exists shows the IRS recognizes this is a widespread issue requiring a practical solution, not criminal enforcement. Fly home for your family emergency with confidence. Handle what's important first, then tackle the tax compliance when you return. The system is actually designed to accommodate people in exactly your situation.